Bitcoin Will Bounce Back After Sharp Sell-Of. Anticipation Builds for Sponge V2 Release

Chaos erupted in the crypto market yesterday as over $600 million worth of leveraged trades were liquidated.

The forced sell-offs were triggered by a sudden 10% drop in the price of flagship crypto Bitcoin from around $45,000 down to $40,750. Similarly, second-largest cryptocurrency Ethereum plunged from $2,320 to $2,100 in the span of hours.

The sheer magnitude of long liquidations shows traders were caught completely off-guard by the abrupt reversal, with overly bullish bets getting decimated in the process. The violent flash crash left many portfolios deep in the red.

However, Bitcoin managed to rebound from below $41k to trade slightly above $43k at the time of writing. Crypto analytics platform Santiment reported that the drop to $42.2K has resulted in the highest Bitcoin trading volume since March 17th. There is potential for daily trading volumes to surpass 2023 highs. The volatile price action indicates increased activity and polarity among crypto traders.

Crypto analyst Crypto El Presidente believes yesterday’s sharp Bitcoin sell-off presents “an extremely good buying opportunity” despite negative sentiment.

He explained that the daily candle’s percentage drop was the 4th largest liquidation event since the FTX collapse. Analyzing the chart, he pointed out that the two largest down candle days happened immediately after FTX’s implosion which rattled the whole crypto market.

Out of the five biggest single-day selloffs since November 2022, yesterday’s candle marked the bottom. El Presidente believes all five severe liquidation events presented prime buying opportunities in hindsight.

He elaborated that while crashes never feel like opportune times to buy in real-time, acting counterintuitively pays off hugely. The analyst closed by saying: “once you learn to think and act in spite (or in opposition) of how you feel, you’ll become much more in sync with the markets. Bullish.”

Similarly, analyst Bluntz
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Author: BeInCrypto Team

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